Marel Strong close of a great year
Marel Poultry delivered very strong results in 2017 after introducing a steady flow of innovative solutions that strengthens the full line offering through standardized building blocks. Its solid operational performance was positively impacted by good market conditions, a balanced product mix, robust orders received and volumes. It accounted for 54% of Marel’s total revenues in 2017. Marel Poultry generated E560 mill in revenues and €110 mill. in EBIT (19.5% EBIT margin) for the full year 2017. This is a 9% increase in revenues and 28% increase from the EBIT of €85 mill. in 2016 (16.6% EBIT margin).
Facilitated by good flexibility in the supply chain organization, orders booked off as revenues were at the highest level ever in poultry.
Orders received in 4Q17 included some large orders from the US and Italy. Projects were well distributed geographically and between different products.
Revenues in 4Q17 were the highest ever for poultry at €154 mill., up 27% (4Q16: €121 mill.). Due to the record high revenues, the order book decreased over the quarter and still shows a strong level going into 2018. These high revenues ensured that the EBIT was very high for the quarter or €34 mill, up 95% YoY (4Q16: €17 mill.). The EBIT margin was 21.8%, compared to 14.2% in 4Q16 and is positively impacted by the high margin orders booked off.
Marel Meat had a good first half of the year with solid operational profit margins, strong volume and good orders received. The second half of 2017 was colored by product mix and timing of deliveries of large orders. A soft outlook is expected to continue in the short term. More focus will be placed on standardization to improve scalability, continued integration and realize operational synergies going forward.
The acquisition of MPS made Marel a full-line supplier to the meat industry by closing the value chain gaps previously existing in the primary processing segment. The company strengthened its position in South America with the acquisition of Brazilian primary meat processor Sulmaq in 2017.
Marel Meat accounted for 32% of Marel’s total revenues in 2017. It generated €334 mill. in revenues and €39 mill. in EBIT (11.5% EBIT margin) for the full year 2017. Revenues were on par with 2016, with EBIT of €52 mill. (15.6% EBIT margin).
Projects were well distributed geographically, with large orders booked in Australia and Russia in 4Q17. The company now covers the entire value chain; from live animal intake to finished consumer product. Marel Meat’s pro-jects in 2017 reflect this scope, as larger installations and Greenfield projects became more prominent, e.g. in Spain, France, Mexico and Korea.
In light of the good results delivered in 2017 and robust order book, the company expects strong organic revenues growth in 2018. Marel is targeting 12% average annual revenue growth in the period 2017–2026, by market penetration and innovation, complemented by strategic partnerships and acquisitions. Marel’s management expects 4–6% average annual market growth in the long term. The company aims to grow organically faster than the market, driven by innovation and market penetration.
Maintaining solid operational performance and strong cash flow supports average 5–7% revenues growth annually by acquisition.
Marel’s management expects Earnings per Share (EPS) to grow faster than revenues. Growth will not be linear but based on opportunities and economic fluctuations. Operational results may vary from quarter to quarter due to general economic developments, fluctuations in orders received and timing of deliveries of larger systems.